Tuesday, January 06, 2015

Eradicating Financial Distress One Teen at a Time

Eradicating Financial Distress One Teen at a Time

Scientists spend countless hours in laboratories searching for solutions to eliminate medical diseases. Today, a group is entering classrooms in economically disadvantaged neighborhoods across the country to eradicate a different kind of disease: financial distress.

“Financial distress is one of the most terrible diseases afflicting our country, but unlike polio or the measles, there’s no vaccination for it,” says Ted Gonder, co-founder of Moneythink, a nonprofit that empowers high school students with financial literacy.

Sure, there are treatments for financial distress, like credit card counseling and debt consolidation. But these solutions draw people who are already facing hardship. Moneythink aims to help young people avoid getting to that point.

Gonder and four of his friends were inspired to launch Moneythink while studying at the University of Chicago in 2009. “Just outside of where we were studying business and economics, the streets were filled with foreclosed homes, broken-down cars and boarded-up shops,” he says. “Helping the community closest to us seemed like the best place to start.”

Personal Motivation

For Gonder, the decision to create Moneythink was a personal one. “Both of my parents grew up with modest means, and they wanted to give me all the opportunities they never had. I went to music lessons and camps, I was a Boy Scout and played sports, but I never understood the value of all I had and I took it for granted,” says Gonder, who admits his apathy caused him to act up in school and earn poor grades.

It was a 19-year-old tutor who finally got through to a young Gonder, changing his perspective. “My tutor was old enough to be respectable, but young enough to be relatable. I’d listen to him before I’d listen to my parents,” Gonder says. “He taught me to treat my life like an entrepreneurial adventure, and he became my role model.”

That’s why Moneythink’s mission is as much about teaching teenagers how to save money as it is about giving them the chance to establish a meaningful relationship with someone they can both laugh with and admire.

Learning from Students

As they worked to launch Moneythink, Gonder and his co-founders skipped class to cold-call local high schools and gauge their interest in a financial literacy tutoring program for 11th and 12th graders.
“Some had financial literacy programs, but they weren’t engaging students. Some said they’d never had financial education in the classroom. But everyone said their students wanted to learn about money,” Gonder says.

They took their pilot program to a few Chicago area high schools and started tutoring students in less-than-exciting subjects like derivatives trading and price versus earnings ratios. “Nothing is more humbling than watching a classroom of high school students fall asleep while you’re trying to teach them something,” he says.

They went right to the source, asking students what they wanted to learn. It turns out they wanted to know about credit card debt and saving money, but it had to be delivered in the right context.

“Everyone knows Kim Kardashian, so we started teaching about spending habits using stories the students had seen about her. Antoine Walker, a well-known professional basketball player, had a very public fall from financial grace, so we used his story to teach what not to do,” Gonder says. “If students relate to the information, it sticks.”

A Nationwide Mentoring Network

About a year after the program launched, college students from across the country began contacting the Moneythink team to start local chapters in their communities. Considering the impact Gonder’s first tutor – as well as other mentors along the way – had on his life, Moneythink’s volunteer mentors have to be the very best.Financial distress is one of the most terrible diseases afflicting our country, but unlike polio or the measles, there's no vaccination for it.— Ted Gonder
“Becoming a mentor at Moneythink is very competitive. Not only do they learn financial literacy as they teach it, but they get to change someone’s life in the process,” Gonder says. “While we don’t necessarily screen candidates based on their SAT scores, we do look for people who are reliable, motivated and passionate about our mission.”

So far, Moneythink has worked with more than 1,000 volunteer mentors from college campuses across the country, many of whom have maintained their mentorship longer than a year. After graduating from college, some of Moneythink’s former mentors have gone on to work for financial institutions such as the World Bank and Northern Trust. Others have moved on to the White House and Teach For America.

These mentors’ impact on high school students and their families is tremendous. For example, one student shared what he was learning about budgeting with his mother. They looked at their family budget one day and realized they wouldn’t be able to afford to keep the heat on that winter. Thanks to his tutoring lessons, they reallocated some spending and figured out a way to keep the heat on.
One student used his savings plan methodology to buy eyeglasses for his little sister, who was being teased at school for not being able to read the chalkboard.

Another student in a Chicago program is separated from his mother and awaiting foster care, and rarely shows up for school. However, he does show up to meet with his Moneythink mentor.
The most important lesson Gonder and volunteer mentors aim to teach is goal setting.

“Whether it’s Nike Air Jordans, tickets to a movie or a song you want to download, when you have a goal – no matter how small – and you achieve it, you build momentum and motivation,” he says. “That’s a really powerful force.”

Today, Moneythink touches 26 communities across 10 states and has brought financial mentoring to more than 9,000 students. By 2030, Gonder envisions a country in which every graduating high school student is equipped with the skills, support and tools needed to navigate the financial decisions of early adulthood.

- See more at: https://wealth.northerntrust.com/investing/eradicating-financial-distress-one-teen-at-a-time#sthash.peVgXZwF.dpuf